Needless to say, the COVID-19 pandemic came out of nowhere and left an economy reeling in its wake. The effect on real estate is profound, but not necessarily crippling.
In this interview, 1031x director Sean Ross speaks with Denver realtor Lauryn Dempsey, who
3-D tours and digital showings. Salvaging terminated listings. Being objective amidst chaos and confusion. It’s all in here.
Let’s dive right in.
Lauryn: If I could sum up the past month in one word, it would be “whiplash.”
Buyers hit the ground running in the new year and the real estate market was hot. Inventory was incredibly low and homes were going under contract on Friday night and Saturday morning instead of allowing showings through the weekend.
I actually had buyers go under contract in the evening of Mar. 15. That’s about when I felt the energy in the market shift dramatically.
I had showings scheduled for the next day — and suddenly those buyers told me they wanted to pause their search until things settle down. Other agents I spoke with saw deals fall through because buyers were scared or whose listings were pulled because sellers felt nervous.
It was eerie and surreal.
Since then, things have changed but the market hasn’t stopped. It’s slowed, sure, but I’ve adapted my business quickly as sentiment and the rules change.
You’ve surely seen this with 1031 exchanges. The new deadline extension that came out Apr. 9 changed the calculus for investors who were looking at a big tax hit if they couldn’t rush into a purchase that may or may not have been appropriate for them.
Lauryn: Embracing technology and doubling down on valuable service. The takeaway here is that despite not being able to physically view a home, offers are still happening and deals are still closing!
Colorado Gov. Jared Polis’ executive order (dated Apr. 6, 2020) stopped all real estate activity unless you are involved in an activity that transfers real property (inspection, appraisal, closing, etc.). This means that buyers can no longer see homes in person unless they’re under contract.
So, I use all available tools to get homes in front of prospective buyers and facilitate virtual showings when requested.
Fortunately — for my sellers — my current marketing package includes many of the tools I’ve always incorporated when listing a home.
- 3-D tours
- Listing videos and video walkthroughs
- Professional photography
- Digital advertising
- Dynamic property sites, e-flyers, and more.
I’ve had to adapt some of these offerings, like incorporating virtual staging instead of physical staging or hosting virtual open houses instead of real ones, but this hasn’t stopped my listings from receiving offers.
Lauryn: Real estate data and trends usually lag about 30-60 days behind events that impact consumers. That means we’re now in the window where the data begins to show COVID-19’s real impact.
Take the week of Week of Monday, April 6th – Sunday, April 12th:
1599 – Down 38% from prior week
Properties Under Contract:
1471 – Down 26% from prior week
503 – Down 6% from prior week
1329 – Down 40% from prior week
(Data compiled from each of the three major MLS providers on Colorado’s Front Range.)
New listings, under contracts, withdrawn and sold homes are all well down compared to the previous week’s data and nowhere near where it typically is this time of year, which is often our busiest.
I expect numbers to continue being down through the length of the executive order and hope to see gradual improvements once restrictions are eased.
Lauryn: Buyers who feel confident in their jobs and financial standing have an opportunity that wasn’t there in the beginning of March.
We know that there are significantly less buyers out looking right now. That means active homebuyers and investors face less competition.
Take two of my clients: they submitted offers well below asking price on homes that had been on the market for just a few days. They received counters, but those were still well below list price!
This is a huge win that wasn’t present in our previously hot market!
One challenge, of course, is low inventory. You’re going to see fewer options. In these cases, I am scouring expired and withdrawn listings to see if there could be a fit and an off-market opportunity.
Lauryn: Multiple offer situations (and offers over asking price) are still happening.
Now more than ever, proper pricing, prep work and staging, and virtual marketing are critical to selling a property. You must heavily scrutinize each offer. Take the time and have long conversations with the buyer’s lender to ensure they’ve done their due diligence.
Job and financial situations are changing rapidly, but I put the work in to make sure it’s a good fit for my client given all we know at the time of the offer. I also want to make sure the buyer actually wants a property they’ve never seen in-person before — especially a home!
Confidence really matters now. I encourage my sellers to request that buyers physically view the home within 24 hours of an accepted offer.
I also think it’s important to manage expectations and to have patience throughout the under contract process. There are many things we cannot control right now and the focus should be on keeping deals under contract if that’s the desire of both parties. Flexibility, understanding and keeping your eye on the ultimate goal of getting to the closing table is an important perspective to keep in mind.
Case-in-point: I had a listing terminate because the buyer’s job situation changed suddenly. But I was able to get it under contract again the next day with a new buyer because I kept tabs with previous agents who showed the property.
Don’t rest easy once a property is under contract. Always try to make sure to have a Plan B in place. These days, backup offers are like gold and can quickly assume first place so that’s a good thing for my sellers.
Lauryn: I am optimistic about the market regaining its mojo. We went into this crisis with incredibly strong tailwinds that are carrying us through fierce headwinds and unknown territory.
My optimism comes from the fact that inventory is low, demand is still strong, and we simply aren’t building homes fast enough to meet the positive net migration we’ve seen in Colorado over the past decade.
These factors may change as we emerge from sheltering-in-place and adjust to our new normal, but historically, the Colorado real estate market is strong and weathers recessions quite well.
Lauryn Dempsey graduated from the U.S. Naval Academy and spent more than a decade working in high-level communications in the U.S. Navy at the Pentagon and overseas, with Colorado tech start-ups, and at the National Renewable Energy Lab (NREL) before turning her decade-long interest in real estate into her profession. Her experience as a strategic communications advisor navigating crisis situations and sensitive issues sets her apart as a realtor. With a bachelor’s degree in economics and a master’s degree in strategy, Lauryn goes beyond the headlines and digs into the data so that she can advise her clients about the realities of the ever-changing real estate market in Denver. She is a member of 8z Real Estate, a Colorado-based brokerage consistently ranked as one of the nation’s top real estate firms.